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FULL OF SCRAP Wait it out or walk away? Is winning hearts worth the war?

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For some scrap processors looking to expand their operations in the glowing scrap metal markets of the past few years, it must seem like hard times when they are dealing with recalcitrant local officials and hysterical neighbors.

Michael Marley

Scrap metal prices are at all-time highs, and demand for ferrous scrap by domestic steelmakers as well as those overseas has been strong for the past few years. In such a healthy economic environment, it's normal for industries to expand their operations, regardless of whether they are making computers or scrapping them.

Unfortunately for scrap metal recyclers, such hopes and plans often face insurmountable hurdles. The nimby (not-in-my-back-yard) mentality often is so overwhelming and so hostile that some have decided it's better to walk away and not endure the slings and arrows of outraged neighbors. Others have found it somewhat less so.

In Hattiesburg, Miss., a small town about 60 miles north of the Gulf Coast, the town planning commission in September approved Southern Scrap Metal Recycling Co.'s plans to locate a small feeder yard there, but told the company it would need to put in a fence and landscaping around the yard and use only designated trucking routes. A month later, the commission did an about-face and rejected the project.

Southern Scrap, a unit of European Metals Recycling Ltd. (EMR), the big British scrap recycler, operates a chain of scrapyards stretching from the Florida panhandle to New Orleans. It wanted to establish its new feeder yard on a small six-acre tract in Hattiesburg's busiest commercial zone, but the town's zoning code makes no specific mention of recycling drop-off centers. That's another way of describing what the scrap industry calls feeder yards.

Zoning laws are what lawyers call restrictive codes. In other words, they allow specified uses of land—housing in residential areas, shopping malls in commercial zones—and prohibit all other uses in each zone. Hattiesburg's full-time planner says that recycling centers like Southern Scrap's proposal are in a gray area between business and industrial uses, and the city's position is that any recycling center must be in an industrial zone.

Joel Dupre, president of Southern Scrap, said all the company wants to do is open a feeder yard. The scrap metal gathered there would be toted to its bigger processing yards in Gulfport, Miss., or New Orleans—no shredder, no balers and no shears; just a few trucks and some material handling equipment to load them.

The recycling company could appeal the planning commission's decision to the Hattiesburg City Council, but Dupre said he is not thinking about that—or about abandoning the company's plans to open a feeder yard there—because town officials have said they are willing to work with Southern Scrap to find another site that is acceptable to both the town and the company.

Southern Scrap's experience might be the exception to the rule, though. Too often, scrap recyclers face a crowd that may be only slightly less hostile than those who lined the streets of Paris in Charles Dickens' famous historical novel and cheered as their own countrymen and women were led to the guillotine.

Take the example of another scrap metal company in the Upper Midwest. It wanted to move its feeder yard to a larger tract of land in Sioux Falls, S.D., bordered by the local airport, but now is abandoning those plans, according to local newspaper reports.

TJN Enterprises Inc., a partnership of Shine Brothers Corp. and Sioux City Compressed Steel Corp., apparently has decided that it might be better to walk away than battle the new neighbors. TJN had an option to buy 32 acres of land near the airport, but that option reportedly has been dropped and the company has withdrawn an application for a conditional-use permit at the site.

The scrap company operates yards in Watertown and Yankton, S.D., as well as in Worthington, Minn., and Estherville, Spencer and Sioux City, Iowa. Most are what the company describes on its website as "feeder yards" that gather material for Shine Brothers' bigger processing yard in Spencer, a small city about 80 miles northeast of Sioux City, S.D., where the company operates a shredder and other processing equipment.

TJN wanted to relocate from its five-acre site in western Sioux Falls. Such plans are part of a concept called economic growth that normally translates into more jobs and more tax revenue for a community. But the community—in this case the neighboring landowners—demanded that the city and state re-define TJN's proposed facility as a junkyard rather than a recycling operation. The landowners in the area apparently didn't think it was a good fit for their locale, even though most feeder yards don't operate at night and they don't produce anywhere near the noise level that bigger yards with shredders and balers can make.

TJN wants to stay in Sioux Falls, a company spokesman told local reporters, but it needs to expand and it needs access to better highways and a railroad. It spent months trying to work through the process of relocating to the airport site by meeting with local officials, but after the neighbors hired a lawyer to fight the plan, city officials wilted under their threats, a TJN source said, forcing the company to abandon its plans.

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